Panoro Energy (Buy, TP: NOK38.00) - Capital allocation in focus
The share price has taken a meaningful hit after the unsuccessful outcome for the Block 2B exploration well offshore South Africa, highlighting elevated investor expectations ahead of the results. That said, the dry well only has a NOK1.6/share negative impact on our NAV, and we see 2023–2024e production growth and an announcement regarding the capital allocation policy (followed by maiden cash dividends in 2023e) as potential share-price catalysts. We reiterate our BUY but have cut our target price to NOK38 (41) to reflect the dry well and slightly lower production, leading to a lower NAV.Panoro Energy is an international independent oil and gas company engaged in the exploration and production of oil and gas resources in Brazil and West Africa. In Brazil, Co. participates in a number of oil and gas licenses located in the Santos basin outside the south-east coast of Brazil and in the Camamu-Almada basin in the state of Bahia. In West Africa, Co. participates in a number of licences in Nigeria and Gabon. As of Dec 31 2013, Co.'s commercial production is from the Manati field in Brazil.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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